Honda is expected to announce on Friday morning its shock withdrawal from formula one.

Honda is expected to announce on Friday morning its shock withdrawal from formula one.

The more than 700 staff at the Japanese team's Brackley (UK) headquarters were informed by bosses Ross Brawn and Nick Fry on Thursday, and fellow teams learned of the decision at the FOTA meeting in Geneva.

A public statement from Tokyo, grappling with news of plummeting sales of road cars, is expected early on Friday, amid rumours the outfit is up for sale and faces complete closure should a buyer not be found by January.

It is understood Honda will take responsibility for any debts, and would hand over the team to a buyer for a nominal price.

The news, amid the global financial crisis, comes after Honda's notable underachievement in the past two years despite one of the biggest budgets in the sport.

It would leave British driver Jenson Button, and his 2008 teammate Rubens Barrichello, without seats for the 2009 season, and scuppers the plans of young hopefuls Bruno Senna and Lucas di Grassi.

The 2009 grid would be reduced to just 18 cars, and spark fears that other manufacturers, whose commitment to formula one was considered perhaps less steadfast than Honda's, could follow suit.

Following the meeting of team bosses in Switzerland, FOTA confirmed in a statement that they "unanimously agreed" to more cost-cutting measures, including a "new low-cost engine" for 2011.

Spokespeople for Honda, and F1's governing body the FIA, declined to comment.

[UPDATE]

Honda Motor Company has confirmed that chief executive and president Takeo Fukui will front a media briefing on the topic of formula one in Tokyo on Friday afternoon (1.30pm Japanese time).

It is widely expected that the Japanese manufacturer will announce its withdrawal from the sport, and the closure of the Brackley (UK) based racing outfit should a buyer not be found in the coming weeks.

Spokespeople for the F1 team and the manufacturer would not confirm the speculation, both instead insisting more information will not be available until Fukui's briefing.

The unofficial news, however, led to shares in Honda Motor Company rising 0.2 per cent.

A financial analyst in Tokyo told the Bloomberg news agency: "A withdrawal by Honda would highlight just how awful the situation surrounding the auto industry is."

Staff of Honda's Brackley factory anonymously said their pay will be guaranteed only to the end of March, and sources at other formula one teams report they were flooded with enquiries about jobs as the news broke.

Sources close to Toyota, meanwhile, flatly denied suggestions it might follow Honda out of formula one, amid similar troubles for the Japanese manufacturer due to the economic downturn.